The opinions here expressed strictly are my own. I serve as senior advisor, economics, for American Principles in Action. I am editor-in-chief of thesupplyside.blogspot.com, and am, with Charles Kadlec, the author of "The 21st Century Gold Standard: For Prosperity, Security, and Liberty," available for free download in ebook form here. Charles Kadlec and I are co-editors of the Laissez Faire Books edition of Copernicus's Essay on Money.
I also authored "The Websters' Dictionary: how to use the Web to transform the world," which won the “Trophée du choix des Internauts” (“The People's Choice”) in the World e-Democracy Forum Awards, 2010, Paris, France. (Download a free and complete eBook version here.) I also manage The Gold Standard Facebook page.
I was a deputy general counsel in the Reagan White House; founded the Prosperity Caucus; and was a member of the original Supply Side movement.
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For The Republicans To Re-Emerge, Horatio Alger Must Die

“In the autobiographies published every year by the billionaire/entrepreneur/rock star/celebrity, the story line is always the same: our hero is born in modest circumstances and by virtue of his own grit and talent fights his way to greatness. … In the famous nineteenth-century novels of Horatio Alger, young boys born into poverty rise to riches through a combination of pluck and initiative. ‘I think overall it’s a disadvantage,’ Jeb Bush once said of what it meant for his business career that he was the son of an American president and the brother of an American president and the grandson of a wealthy Wall Street banker and US senator. When he ran for governor of Florida, he repeatedly referred to himself as a ‘self-made man,’ and it is a measure of how deeply we associate success with the efforts of the individual that few batted an eye at that description.” — Malcolm Gladwell, Outliers: the Story of Success, p. 18

This columnist, last week, observed that “The GOP’s moral imperative is in fighting for equal opportunity and equal justice for ‘the little guy.’ It is in default.”

Why has this default happened? The evidence says that Horatio Alger is the perp. And so Horatio Alger must die.

One of the most heartbreaking books this columnist ever has read is Outliers: The Story of Success, by Malcolm Gladwell. The heartbreak? It lays out cost-free, proven successful, directions — to create extraordinary successes. The world marveled and then, mostly, ignored it.

In Outliers, Gladwell quantifies and analyzes compelling factors that fall outside the narrative that too often governs political thought in America. To get America back on track we have to shatter the governing Horatio Alger myth.

Gladwell: “People don’t rise from nothing. …. The people who stand before kings may look like they did it all by themselves. But in fact they are invariably the beneficiaries of hidden advantages and extraordinary opportunities and cultural legacies that allow them to learn and work hard and make sense of the world in ways others cannot.”

Gladwell by no means diminishes the crucial roles both of talent and effort for success. Yet he rescues, and reveals, the role that opportunity plays in every success story he investigates.

“If we put the stories of the hockey players and the Beatles and Bill Joy and Bill Gates together, I think we get a more complete picture of the path to success. Joy and Gates and the Beatles are all undeniably talented. Lennon and McCartney had a musical gift that comes along once in a generation, and Bill Joy, let us not forget, had a mind so quick that he was able to make up a complicated algorithm on the fly that left his professors in awe. That much is obvious. But what truly distinguishes their histories is not their extraordinary talent but their extraordinary opportunities.”

Gladwell takes us on a tour of history that demonstrates how extraordinary, and extraordinarily wide, windows of opportunity sometimes open … and what then occurs. One of these windows coincides neatly with the era of the classical gold standard in America.

Gladwell presents a list of the 75 richest people in history.

“Do you know what’s interesting about that list? Of seventy-five names, an astonishing fourteen are Americans born within nine years of one another in the mid-nineteenth century. Think about that for a moment. Historians start with Cleopatra and the pharaohs and comb through every year in human history ever since, looking at every corner of the world for evidence of extraordinary wealth, and almost 20 percent of the names they come up with come from a single generation in a single country. What’s going on here? … In the 1860s and 1870s, the American economy went through perhaps the greatest transformation in its history. … [T]here was a particular, narrow nine-year window that was just perfect for seeing the potential that the future held.”

Lewis observes that GDP growth between 1870 and 1912 was 682%. It was perhaps the greatest epoch of broad-based prosperity recorded in human history. It yielded many successes, both extraordinary and ordinary. It was an era of a rising tide lifting all boats. One hopes our officials will choose, soon, to replicate the formula. This correlation between gold and wide social prospering suggests that there may be an extraordinary implication to Gladwell’s thesis about extraordinary opportunity.

What, though, are the ordinary implications of Gladwell’s prescription? Gladwell lays out, for example, how KIPP Academy consistently vastly overperforms the Pyongyang-style education that so typically passes for “public” in America. He also shows how setting additional intermediate cutoff birth dates for youth could double or more the number of opportunities for talented, hardworking, kids to go on to success and perhaps stardom. “I mean, it’s ridiculous…. It’s outlandish that our arbitrary choice of cutoff dates is causing these long-lasting effects, and no one seems to care about them,” he quotes economist Elizabeth Dhuey as saying.

But to focus, alone, on macroeconomic policy, such as monetary reform, or to focus, alone, in micro experiments, such as KIPP, misses the larger point. The creation of extraordinary opportunity is not a zero-sum game. It does not imply that we should steal from the rich to give to the poor (or, as is much more common in our corporate welfare state, the converse).

It has to do with a core insight: people better themselves, whether in the process of becoming billionaires or simply achieving middle class affluence, according to their talents and determination, and according to whether they find opportunity. As Gladwell makes clear there are extraordinary opportunities that can be created at zero taxpayer or social cost. They are hiding in plain sight.

This is how Republicans, in principled fashion, can climb out of moral default in putting themselves on the side of the little guy. Democrats can, without forsaking their principles, dig themselves out of the ditch of redistributionism. Candidates can prescribe, and elected officials can implement, ways to create (or at minimum not negate) opportunity — if they will just set their minds to it.

The federal government requires “environmental impact statements” and “budgetary impact statements” galore. High time, if the politicos can get authentic about it, for legislation and regulation to carry a rigorous “opportunity impact statement.”

We need not to go in search of the miraculous. To restore America to its status as “the land of opportunity” merely requires that officials of both parties commit themselves to follow Peter Drucker’s core insight, from The Effective Executive: “In every area of effectiveness within an organization, one feeds the opportunities and starves the problem.” (Original emphasis.)

Horatio Alger blinds Republicans to the fact that the axiom that “grit and talent fights his way to greatness” is necessary but not sufficient. People require opportunity as well and a climate of opportunity can be generated. Alger has blinded Democrats to the possibility of creating a climate of opportunity — rather than social welfare programs on which few, if any, have thrived — to allow their constituents to flourish. “Outliers,” writes Gladwell, are those who have been given opportunities—and who have had the strength and presence of mind to seize them. … The world could be so much richer than the world we have settled for.”

Settle no longer. As Herman Hesse wrote, in Demian, “Who would be born must first destroy a world.” Horatio Alger must die.

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